The crimeware empire built by the infamous Blackhole Exploit Kit appears to be crumbling with the news that a criminal group using the important Cutwail botnet has defected to a rival platform.

Dell SecureWorks Counter Threat Unit said its researchers noticed the sudden move from Blackhole to the Magnitude Exploit Kit (formerly called ‘Popads’) shortly after news emerged of the arrest of the former’s alleged creator by Russian police two weeks ago.

That individual - nicknamed ‘Paunch’ - still hasn’t been named but it’s now looking as if his customers reacted swiftly to the downing of Blackhole’s services in the interests of continuity.

Cutwail had previously been used to distribute the Gameover Zeus malware, but the latest campaigns were now also hitting victims with a malicious iFrame redirecting to Magnitude which in turn is pushing ZeroAccess bot to anyone open to specific software vulnerabilities.

This is a nasty combination but standard fare from today’s criminals and their use of crimeware platforms. Gameover Zeus is a banking Trojan while ZeroAccess specialises in clickfraud, spam, and Bitcoin mining.

According to the firm, the long-term consequences of Paunch’s arrest could go far beyond the disappearance of one of the crimeware industry’s most successful ever distribution systems.

“One particular area of concern in Russian underground forums is whether users of BHEK [Blachole Exploit Kit] could face arrests themselves. In particular, users who purchased BHEK directly from Paunch or his authorized resellers would be in Paunch’s database of clients, which is now presumably in the hands of law enforcement,” said Trend researcher, Jonathan Leopando.

It had also been rumoured that he could trade a jail sentence in return for work inside Russia’s security service, the FSB.

“In the long term, the impact of BHEK’s apparent demise remains somewhat unclear. Other exploit kits are available, but these may not have the support structure that Paunch was able to build with BHEK.”